- Results: During a Thursday earnings call, CEO Jim Fish attributed strong Q4 and full-year results to “continuously improving our core business” as well as adding medical waste and secure information destruction services from its recent $7.2 billion acquisition of Stericycle. WM grew adjusted operating EBITDA by 11% in 2024.
- Margin milestones: WM’s collection and disposal business achieved a 37.2% margin for 2024, the company’s highest ever, executives said. WM expects another 5% margin growth in that side of the business in 2025. Meanwhile, WM’s legacy business — the new term for operations not related to Stericycle — achieved a 30% margin for 2024, a first for the company.
- Stericycle integration: Fish said WM is integrating the medical waste and secure information destruction businesses into a segment now known as WM Healthcare Solutions. In 2025, that segment is expected to grow about 9% before synergies, driven mostly by organic revenue growth and “operations initiatives,” he said.
- Stericycle synergies: WM expects synergies from the Stericycle deal to be about $250 million over a three year period, with about $100 million of that in 2025. That’s double WMs previous estimate. Rafael Carrasco, who heads WM Healthcare Solutions, said factors influencing the new synergy estimates include adjustments to operational expenditures, sales coverage and recycling capacity, as well as bringing the segment’s maintenance and repair needs in-house.
- Cross-selling opportunities: Fish said cross-selling would be “the single biggest opportunity we have over the long term for this business,” noting that during routine visits to his doctors, he noticed some clinics used WM services, while others used Stericycle’s. Carrasco added that cross selling isn’t built into 2025 business plans, but plans for some options in 2026.
- Other acquisitions: CFO Davina Rankin noted WM invested about $800 million in other tuck-in acquisitions in 2024, which “expands our traditional solid waste and recycling footprint” and contributed about $150 million of revenue growth in 2024. In 2025, the company expects to invest between $100 to $200 million in solid waste acquisitions, she said.
- RNG updates: WM brought five renewable natural gas facilities online in 2024, and “we feel really good about the eight plants we're going to bring online in 2025,” added Chief Sustainability Officer Tara Hemmer. WM doesn’t expect to see revenue on 2025 builds until after 2026, due to commissioning timing, “but most of these plants are going to be done and completed. We have solid momentum there.”
- Recycling facility updates: WM made automation upgrades at 10 recycling facilities and built two new ones in 2024. Those improvements have allowed the company to automate about 850 roles and attain price premiums on the commodities that come from those facilities. “That's a benefit that's going to run straight to EBITDA,” she said.
- Outlook: WM expects to see “a significant step change” in revenue and earnings in 2025, due to solid waste business growth and the addition of WM Healthcare Solutions. Rollover from solid waste acquisitions is also expected to contribute $150 million of revenue in 2025, as well as $35 million of adjusted operating EBITDA. WM estimates about $150 million in operating EBITDA growth in 2025 related to both recycling and RNG projects.
WM reports margin milestones for Q4, focuses on Stericycle integration in 2025
WM expects synergies from the Stericycle deal to be about $250 million over a three year period, with about $100 million of that in 2025. It also expects to complete more RNG facilites in 2025.